Page 43 - UKRRptJul21

ahead of the first quarter earnings.
May’s monthly profit was almost double what banks had earned in May a year previously (UAH3.8bn) which was the first month of full crisis. However, in a good sign, this May’s earnings was also ahead of the UAH5.3bn banks earned in May 2019, a strong year, and even further ahead of 2018 (UAH2bn) and 2017 (a loss of UAH2.6bn). The monthly results for May strongly suggest that the bank sector is well on the way to recovery but it still has at least another 30% of upside ahead of it for profits.
On a cumulative basis, Ukraine’s banks did slightly less well than in 2020 over the first five months of this year compared to 2020, but were almost exactly on a par with 2019.
Banks earned UAH23.8bn ($869mn) over the first five months, less than in the same period in 2020 (UAH28.9bn) but almost the same as in 2019 (UAH23.4bn).
After a strong year in 2019, Ukraine banks were looking forward to 2020 and expected to extend their gains as the economy began to build up some economic momentum after five years of post-revolution crisis. But it was not to be after the oil shock and coronavirus double whammy hit in April.
Thanks to the clean up of the sector and the closer supervision of the NBU in last six year the banks went into the 2020 crisis from a much stronger position and weathered the subsequent storm surprisingly well.
The prospects for banks to outperform the 2019 results is mixed. Although the economy is expected to grow by some 4% this year, the results of the second quarter already highlight problems and a slowdown in the pace of recovery that will take the edge off growth that probably mean banks will continue to track the 2019 sector results for the time being.
43 UKRAINE Country Report July 2021 www.intellinews.com